A question to the already retired. Based on your salary when you retired what % was needed after you retired? Is it true that you only need 75% of your current income for retirement? I am having trouble figuring out how this 75% of current salary occurs. Will apprciate any feedback. Thanks Mike
crawf asks,A question to the already retired. Based on your salary when you retired what % was needed after you retired? Is it true that you only need 75% of your current income for retirement? I am having trouble figuring out how this 75% of current salary occurs. Will apprciate any feedback. Thanks MikeI'm only spending about 30% of my former salary in retirement, but then I was only spending about 30% of my salary when I was working -- that's how I retired at age 38.I'd ignore the 75% rule. Some folks spend more, some a lot less.The best thing to do is to track your expenditures for 2 or 3 years before you retire to get a baseline budget, then estimate how your expenses will change once you retire. For example, I've found what I'm saving on commuting costs and work clothes (suits and ties, mostly) I'm spending on health insurance (now I have to pay for my own) and greens fees (since I have more time to play golf), but my overall spending remains about the same.intercst
I agree with intercst. I retired about 6 months ago and it seems to me that the amount of money you will need is highly dependent on your desires and situation.If you plan to spend your money like Hal McCabe (as has been discussed on the Retirement Investing board) then you may find yourself spending much more in retirement than your current salary. :-)Although I have a new expense, private health insurance for my wife and I, it is costing less per year than I was paying in Social Security and Medicare taxes when I was working.
I am also of the opinion that the percentage of your retirement needs vs. working needs has many variables.My husband worked 8 miles from home and had work clothes provided by his employer. Fortunately our medical insurance is covered in full for retirees and spouse, and our home was paid off before he retired.Other fixed bills remain the same and we spend more on things we want, rather than necessities. More money is spent visiting children and others in distant states, so retirement feels very good, and I would say that it is definitely a great time of life! Summing up, we spend about the same as we did when he was working though our income is less, which is possible because we don't put that extra money away to "save for retiremnt" since we have "arrived at retirement"!
After a year of retirement at age 60, our takehome salary is about the same as when I was working. The gross is less because I was contributing 6% to my 401K. Our COBRA insurance coverage is up in November and we're being forced into a risk pool so our insurance cost will be going up.Ken
Thanks for the input from all of you. Sounds like I should plan on spending bascically what I am now but it will be spent in different areas. I felt that way also however wanted others opinions on it. Mike
Been reBeen retired a yr. You have to transition into reduccing expenses(living) even if you are mortage car note and credit card payments free. If you aren't careful you will been spending more in retirement than you were while working.Can you share the name of the private health insur that is so inexpensive. I'll have to pick up some in Dec-99, I'll be losing my COBRA benefitsThanks- zrobin
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